February 21, 2014 at 1:05 p.m.
LIVE: Budget 2014
LIVE: Budget 2014
11:51am: It is time for us to all work together. And that's it. He's done with speech. Stay with the Bermuda Sun website as we'll give you analysis on the Budget. Thanks for following the Live blog.
11:50am: Richards is starting to wrap it up now.
11:49am: The potential of industrial disputes could impact foreign investors. Reduced enthusiasm for hotel developments, which in turn could dampen enthusiasm for new airport development, It is a knock on effect. All oars have to be pulling in the same direction. Government cannot do it alone.
11:47am: Public safety is important to get others to invest in Bermuda.
11:46am: The Ministry of Health is the highest spending department of Government. There is a problem with the cost of health care "it is like a fast car with no brakes".
11:44am: No redundancies this year. But spending cuts must in the future will have to come from staff cuts through mutualization or privatization. This is a tough decision that has to be made.
11:43am: PENSIONS - Heightened public awareness of the problems.
11:41am: The cost of Government is unsustainable and out of control... that' why we are moving forward on this.
11:38am: A reform act will set up a new efficiency authority. This new board will have seven members, including two from the unions. Airport, vehicle testing, CITV, Tynes Bay and garbage collection, vehicle maintenance, Parks Social Insurance, Highway maintenance among others.
11:37am: We need to harness the talent we have in the civil service to bring forth the best for the public.
11:36am: SAGE - Public service reform will begin.
11:34am: No immediate privatization or mutalization, but talks are ongoing.
11:32am: $1.169B in expenditures in 2014-15. This can be achieved without the layoff of workers.
11:31am: First mention of SAGE - more to come later in the Budget.
11:30am: Some ministries within Government are lacking accountability.
11:29am: Revenues were up $21m than estimated but expenditures were $32m more than expected.
11:28am: Revenue $901M for 2014-15, we will have a Budget deficit of $267.6M for 2014-15.
11:27: The net debt to GDP ration of March 2014 will be 32%.
11:25am: Two private placement notes will mature in 2014. $2.185billion in debt as of March 2015.
11:23am: $945.6M in spending - a 7% reduction for 2014-15 budget.
11:22am: Richards is targeting cost savings of 15% by the end of three years.
11:20am: "With the economy still fragile, it would be bad policy to raise taxes at this time." If we cancel tax breaks, jobs would likely be lost... so we have to cut costs.
11:19am: "The Bermuda Government has not lived within its means for many, many years."
11:16am: The tax break for properties being sold did not show an increase, but we think it was because of red tape so lower taxes will remain for another year as the red tape is cleared out.
11:15am: The tax break given to new Bermudian hires saw 217 new people employed. We are going to continue this for 2014-15.
11:13am: We will look at Aqua culture. We are looking at setting up a Risk Institute since we are one of the three major centres of risk capital in the world.
11:12am: The new hotels, the airport and the deal with Morgan's Point will help stimulate the economy.
11:11am: We must continue to attract the best from the cruise lines. Our channels need to be looked at. Near an agreement with Morgan's Point with a new deal. That will include helping clean up the former baselands.
11:09am: The introduction of casino gambling is crucial to attracting new hotels and creating jobs. The gaming model will be highly-structured. The three casino licences granted will only be for NEW hotels.
11:07am: Tynes Bay could be another PPP. Bermuda needs top brand name hotels.
11:06am: How can Government provide a stimulus? Government is tapped out so it has to help through public-private-partnerships. The airport needs a PPP which would include a new causeway that can withstand a hurricane and a new terminal that won't flood. This is high on our list. A need airport will be a job creator.
11:04am: "We used to dominate the offshore sector but have lost ground" to our competition.
11:03am: That's why we have to look at areas where we are already successful. Insurance Linked Securities is one area. Asset Management is another.
11:02am: The Government will not support schemes that do not show promise.
11:00am: "Where is growth going to come from" for Bermuda? "Growth will come from innovative people."
11am: The monopoly power of BELCO requires a good looking at.
10:59am: BELCO and Government have been noncompetitive but have become inefficient. The time is now to change this.
10:58am: BELCO has a good reputation for reliability but the Bermudian people have paid for this non-competitive environment.
10:57am: Bermuda is at a competitive loss because of the high cost of electricity. This hurts hotels. "It is a great burden for the Bermudian people."
10:56am: Government is in discussion with bankers to correct this.
10:55am: "There is no appetite for lending... and they continue to layoff Bermudians staff."
10:54am: Banks in Bermuda follow the US Federal Reserve along with their own interests. Which doesn't always suit what best helps Bermuda.
10:53am: Banks are important to Bermuda's economy.
10:52am: "We are not taking this attack on our economic model lying down." Our tax system must remain intact and remain robust.
10:51am: "Bermuda is not a tax haven. Our tax system is different from other countries. We do not have income tax and we do not apologize for that."
10:50am: "Exempt companies pay the same taxes as local companies."
10:48am: The international environment is 'hostile" but we still have many friends and allies. Bermudians pay taxes.
10:47am: "It was with great dismay when we were publicly chastised by her Majesty's Government" $40M in contracts were cancelled when France blacklisted us. The UK Government assisted in helping get Bermuda off that list.
10:46am: Tax haven hysteria targeted Bermuda and other dots on the map. The former Government did a good job in combatting that.
10:45am: It is forcing companies to remain cost conscious. Bermuda-based companies have outsourced jobs because of this and "robbed Bermudians of job opportunities".
10:44am: The global economy is continuing in unspectacular fashion.
10:43am: "We must embrace change and make the best of it."
10:42am: We can't just tax the overseas companies or they could leave like they did under the last Government.
10:41am: "The onus is on us to do better." If we don't, then we will lose our financial independence.
10:40am: Credit markets are aware of high debts by small countries with little or no natural resources. We have to manage our fiscal affairs responsibilities.
10:39am: If we don't get our finances in control, then the decisions will be made by overseas powers whether that's the UK or financial powers.
10:38am: In today's globalized world, no country is free from it.
10:37am: The 60/40 rules on protected those who already had the power. Today's Bermuda needs capital to recover and there's only one place to get it - outside of Bermuda. People who stir up fear about foreigners only do it for political reasons. This government chooses prosperity.
10:34am: Immigration must be made easier to help these people come to Bermuda. Protectionism speaks to fears about foreigners. Bermuda has always relied on foreigners for our growth like the airports, the hotels and international business. A successful and vibrant Bermuda economic cannot happen without the participation of the outside world.
10:33am: The only alternative is to import people by attracting people who can bring capital to our shores (either financial or intellectual).
10:31am: We have lost population over the last five years. The exact number is a distraction - we can't grow GDP without growing the population.
10:30am: We must have a two-track policy of growing the economy and cutting costs.
10:29am: If we don't change, our deficit will reach $4 billion in four years time.
10:28am: "We cannot just rely on growth." We need to do cuts too. "We have to do both at the same time."
10:27am: "We are sick and tired of being sick and tired." We can not expect to do the same old thing and get a different outcome.
10:26am: The concerns about the costs of food, banking and electricity are too high. We were pleased with the supermarkets increasing the discount from 5% to 10% on Wednesdays. We are discussing trying to do something with banking and electricity.
10:25am: The public service is pitching in. They are doing their part. The cost of living remains too high.
10:24am: Cash grants for financial assistance have skyrocketed in recent years. "It has become a major Budget issue."
10:23am: The construction sector has not recovered. The opportunities for small businessmen in the construction have been limited.
10:21am: Bermudians have one of the highest incomes in the world but without using it for purchasing parity, it is meaningless. We have to reduce the gap between the haves and the have nots.
10:20am: It should be noted the Bermuda College economics lecturer said in order for Bermuda to be officially out of the recession, there needs to be three consecutive months of increase in VOLUME in the retail sales index.
10:19am: No evidence of recovery in GDP, retail sales show a mixed result, faltering slightly in 2013.
10:17am: Richards going over various figures showing how the economy is turning around - less unemployment, more companies being formed, more customs duty collected.
10:16am: "This Government has reduced the risk" for business in Bermuda.
10:15am: Richards: New jobs come from expanding old business or new business coming to Bermuda.
10:14am: Richards - We are helping instill confidence in Bermuda. It was at a low ebb when we were elected.
10:12am: Mr Richards - we are not putting business before the people.
10:11am: Mr Richards called the recent PLP Budgets as "careless".
10:10am: "The world will bury us if we don't change. The status quo is the enemy."
10:09: Richards: "It will take many years" to turn this around,
10:08am: The preliminaries are finished and Bob Richards has the mic.
10:07am: Mr Horton saying he's going to take some of the MPs to the woodshed about the conduct in the House - i.e. will have a meeting in his chamber.
10:05am: The Speaker of the House Randy Horton says "The people of Bermuda elected us to be leaders... I hope we live up to that standard. We must raise that standard."
10:03am: The prayer is finished. There are usually some housekeeping duties for them to work through first.
10:00am: The House is in now in session and have opened in prayer.
9:53am: Some SAGE recommendations are going into effect as the Rent Commissioner's Office is being merged into the Department of Consumer Affairs. See the story below in the links.
9:49am: Taxi drivers are hoping to be able to get their long-awaited fare increase. BTOA president Derek Young said yesterday they were also hoping Government would allow them to buy secondhand cars to use as taxis.
9:45am: Mutualization could be a big theme in this year's Budget. What is Mutualization? Instead of privatizing Government departments, they could very well be mutualized where the workers get a piece of the business as they are spun off from Government. KPMG's Lori Rockhead wrote a very good column piece about this today.
9:40am: At last year's Budget Breakfast Bob Richards said: “I wouldn’t say I’ve written this year off, but things are going to be difficult for this year because what we’ve done so far has to take time to kick in. Next year I’m hopeful things will be better, but we’ll see as we go along.”
9:37am: The Budget Speech is expected to be delivered at 10:30am this morning. Finance Minister Bob Richards was on the steps of the House of Assembly at 9:30am for his photo op with the briefcase. It would be awesome if he showed up with a Romero Britto briefcase rather than the regular brown or black leather one that is normally used.
9:30am: This Budget is expected to have a bit more pain in it. Last year, Finance Minister Bob Richards called Bermuda a big 'ship' and that it takes a long time to make a turn. With Captain Bob at the helm last year, Bermuda started that turn. This year, many of the SAGE recommendations should be included in it as Government tries to cut expenses and raise revenue.
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